COAI welcomes Union Cabinet's move to ease stress on telecom services sector

The Cellular Operators Association of India (COAI) has welcomed the Union Cabinet's approval for the proposal of mitigating financial stress being faced by the telecom services sector in the country.

"We welcome the fact that the government recognises the financial distress of the telecom sector and has provided relief in the form of deferments of spectrum payments. We are very thankful to our Minister, Ravi Shankar Prasad and the DoT for supporting us and pushing forward our request to the Finance Minister for action. This will certainly provide some immediate cash flow relief to the industry," a note by the DG, COAI Rajan S Mathews on Wednesday read.

The Department of Telecommunication will now give an option to the Telecom Service Providers (TSPs) to defer payment of the spectrum auction instalments due for 2020-21 and 2021-22, either for one or both years.

"These deferred amounts bill be spread equally in the remaining instalments to be paid by TSPs. Interest, as stipulated while auctioning of the concerned spectrum, will, however, be charged so that NPV is protected," an official release from Cabinet said.

According to the release, the decision for deferring spectrum payment instalments for two years will be implemented within a fortnight.

The COAI, however, added that the high level of levies and taxes continue to be a challenge for the telecom sector.

"The telcos pay up to 30% of their revenues to the government, by way of various levies and taxes, which is an enormous burden on the industry," the note by DG, COAI read.

It also urged the government to rationalise the level of taxes and levies through its note.